Federal Appeals Court weighs Arkansas laws on foreign land ownership and crypto mining

Attorneys argued Wednesday before the Eighth Circuit Court of Appeals over whether Arkansas laws restricting foreign ownership of farmland and digital asset mining operations improperly encroach on federal authority.The case, Jones Eagle, LLC v. Wes Ward, et al., centers on a dispute between a U.S. citizen-owned cryptocurrency mining company and Arkansas state officials, including Secretary of Agriculture Wes Ward and Attorney General Tim Griffin. The appeal challenges a lower court’s preliminary injunction that blocks enforcement of Acts 636 and 174, which the court found were likely preempted by federal laws governing foreign investment and arms exports.

Jones Eagle operates in Arkansas and is led by Qimin “Jimmy” Chen, a naturalized U.S. citizen born in China. The company alleges the state retaliated against Chen after he previously secured a federal injunction allowing his business to begin operations. The challenged laws prohibit land ownership and certain business activities by entities connected to countries subject to U.S. arms export restrictions under the International Traffic in Arms Regulations.

State officials argue the statutes fall within long-standing state authority to regulate land ownership and protect public health and safety, an authority they say dates back to the nation’s founding. They contend the laws do not conflict with federal statutes such as the Foreign Investment Risk Review Modernization Act and should be presumed valid under principles limiting federal preemption of state law.

During oral arguments, judges questioned whether the company’s claims were ripe for federal review, pointing to an ongoing state subpoena issued to Jones Eagle. State attorneys responded that the subpoena was issued under a separate statute and was not self-executing, suggesting federal courts should abstain while state enforcement proceedings continue.

The panel also examined potential conflicts between the Arkansas laws and federal review of foreign investment near sensitive sites, such as military bases. State attorneys maintained that federal review mechanisms are narrow in scope and do not authorize or approve transactions, but instead provide limited national security oversight.

Jones Eagle countered that the state’s actions created concrete harms, including disrupted land purchases and ongoing investigations that interfered with business operations. The company maintains that the Arkansas laws intrude into areas reserved for federal control, including foreign affairs, foreign relations, and national security, and warned that allowing individual states to target specific foreign countries could create conflicting national policies.

The three-judge panel included U.S. Circuit Judges Bobby Shepherd, Lane Kelly and David Stras. A decision from the court is pending.

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